Manufacturing is Overrated

[FUNKED1]

Originally posted by Nashwan
At the moment the US isn't. It's using borrowed money to pay the somebody in China, to the tune of about 5% of GDP per year.

You are confusing consumers and government.

[Mini D]

Originally posted by FUNKED1
I'm not sure I understand your post.  Are you agreeing with me?  The economic trends during 90's in the USA would most definitely not support an argument that manufacturing is a "special" sector that trumps service or knowledge based industries.
Everybody else missed the point of the article, don't be that guy.

Special sector?  I never said that.

The 90's showed that buisness without industry is a recipe for dissaster.  As a matter of fact, the late 20's demonstrated that too.

There needs to be a balance between buisness and industry.  Shifting all manufacturing overseas greatly upsets that balance.  I don't know of a single economicly successful nation that does it.  Everyone has their industry as a backbone to virtually all buisness.

Once you lose the manufacturing capability, you will ultimately be endebted to those that are doing the manufacturing.   Preaching even more of a shift of manufacturing is opening the floodgates for dissaster.  The only stable option is maintaining manufacturing capabilities and sharing resources vs completely relying on someone else.  Given the opportunity, every nation on earth will exploit the weakness of another nation.

[oboe]

Switzerland, MiniD?  Special case?

[Suave]

Manufacturing is becoming more effecient, therefor presently employs less people, much the same happened to agriculture. And people should not interpret that as a portent of a falling economy, and try to remedy it.  Agriculture produces and markets more now than it ever has, yet a relatively small fraction of the population are employed in the agriculture industry. We didn't miss the point.

But agriculture and manufacturing will both  continue to be fields integral to human expansion. And both industries will continue to grow. Can you imagine what agriculture, manufacturing and civil engineering will be like when/if interplanetary colonization begins.

[Mini D]

Originally posted by oboe
Switzerland, MiniD?  Special case?

Yes.

[FUNKED1]

MiniD the 90's saw productivity and real GDP per capita make huge gains, despite increasing market share for imported goods.  There was no disaster caused by decreases in manufacturing employment as a percentage of the workforce.  

Regardless of what sectors are most prominent, business cycles will still happen.  We went through a mild one, in a historical context and in the context of what other large developed nations went through during the same period.  The GDP and productivity gains were not lost, despite all of the politically motivated "recession" hype.

Suave summed it up pretty well.  If I'm building a straw man of you I apologize.

[FUNKED1]

And I take it back, more people got it than I thought.  I'm good at talking but not at listening.

[FUNKED1]

Originally posted by oboe
So what's the next base for an economy after agriculture, manufacturing, and service jobs?   We'd better get started.  Because the next shift is going to happen even faster than the first two.

PR0N

[Dune]

Some day we'll create a race of AI to do this for us.  Of course, they'll eventually turn on us and force us to fight for our lives.  Then, in the event we win, our world will be so destroyed that we'll long for the day we can manufacture the goods we have now.

[Reschke]

Originally posted by oboe
I think that is a great idea, but it is a political solution, and guess who controls both houses and the Presidency?    They'll never go for it.   Although Reagan wasn't afraid to slap tariffs on unfair competitors, so maybe I'd be surprised.

OK slap the tariffs back on steel and see who gets hurt by that. If we as a nation do  that now you can kiss the exports to Europe goodbye that we do as a result of the weak Dollar against the Euro.

Its all part of the cycle and if you don't think the economies all over the world aren't tied together tight then take a look at currency values sometime.

[Nashwan]

You are confusing consumers and government.

No, I'm not talking about government at all.

US consumers are buying from abroad goods worth more than America sells abroad.

Because America isn't sending enough goods abroad to pay for the goods it's importing, it has to send cash instead. All cash is is an iou.

The problem is, America simply isn't producing enough goods and services to support it's current lifestyle, so is buying more from abroad, and sending IOUs to pay for them.

[oboe]

Originally posted by Reschke
OK slap the tariffs back on steel and see who gets hurt by that. If we as a nation do  that now you can kiss the exports to Europe goodbye that we do as a result of the weak Dollar against the Euro.

Its all part of the cycle and if you don't think the economies all over the world aren't tied together tight then take a look at currency values sometime.

Why steel?    I was thinking more of manufactured consumer goods.

Is there no way out for the US middle class?    Will the change in equilibrium set off by NAFTA and expanded trade with China eventually result in the dragging down of the US middle class to standards of living comparable to the working classes of Taiwan, China, Mexico, and the Phillippines?

[Mini D]

Originally posted by FUNKED1
MiniD the 90's saw productivity and real GDP per capita make huge gains, despite increasing market share for imported goods.  There was no disaster caused by decreases in manufacturing employment as a percentage of the workforce.  
 

Bull****.  Every time it happens there is a reset.  A giant slap in the face at which point some people realize that you need both.  Leaning too far towards buisness has ALWAYS caused the recessions... not leaning too far towards manufacturing.

Hell... 99% of buisness is sitting back and trying to make money off of someone else's manufacturing.  It really is that simple.  The more people that do it, the less there is to actually make money off.  So, we end up finding we can make more money if we move manufacturing entirely oversees and have someone else do all the work.  We become an entirely service based society and end up fat dumb and happy.  Then China bans exports to the U.S. and... um... oh yeah, we just start up again?

The U.S.S.R.'s ignorance of world economy was their own undoing.  Too much military spending, too little non-military exports.  No real balance with anything they did.  The U.S. will fall into the trap of thinking that you can simply sit back and let the rest of the world do the work and make all the money off of it.  At some point, the workers aren't going to apreciate that very much.

[storch]

We have a gate and decorative fence shop.  Basically we heat and beat steel into submission.  we also fabricate from any metallic medium and build wooden fences as well, from the mundane to the sublime.  That makes me a manufacturer.  There is no shortage of demand for our product in this market.  We have orders taking us through May 2005.  Slap tariffs on steel or not, no matter we only use domestic steel.  foreign steel generally is very inconsistent in it's treating and carbon composition.

Foreign aluminum is even worse at times almost unweldable.  My welders curse me up and down the few times I've tried to implement it.  The truth is if I had to weld that crap day in day out I would look for work elsewhere.

For the slight difference in price between the two I'll stick with domestic.  The quality of American made products is unsurpassed.

I still refuse to purchase Chinese castings for our finials and collars.  My business still goes to the local foundry even though there I pay three times as much for the product.  The difference is notable when you hold the products side by side.  The difference in the cost is passed on to the consumer.  When I make a sales call I take samples with me and I allow the customer to select which finial they would prefer.  When they ask me to "sharpen my pencil" a bit I show them what I must do to bring the price in line with my colleagues.  After a pitch on supporting the local economy and the blaring difference in quality it is usually an easy sell.

There is one notable exception, nails.  For our wooden fences we use nails manufactured in the United Arab Emirates by an outfit called TIMCO.  The quality of their fasteners is unbelievable but they are not cheaper than domestic, they are about on par.

The price of steel and other construction related materials is currently being driven by Chinese comsumption.  Many of us see China as an exporter but what many fail to see is that the Chinese economy grew on the order of 500% last year.  Chinese demand far outstrips Chinese production capabilities.  With steel in particular the impact is world wide.  The price of steel is rising steadily and will probably do so for many years to come.  Don't hold a wake for Americam manufacturing jobs just yet.

[john9001]

world steel production::

china leads with 130 million tons/year

US & japan tie for 2nd-3rd with about 110 tons

next place is about 50-60 tons

it goes down from there.


i'm always amazed when people say "the US is a service economy", do you think nothing is made in the US?


in the intrest of accuarcy, the new figures are::

page 3
The major steel-producing countries,
2002 and 2003
million metric tonnes crude steel production
Country 2003               2002
       Rank Tonnage       Rank Tonnage
China 1 220.1              1 182.2
Japan 2 110.5              2 107.7
United States 3 90.4    3 91.6
Russia 4 62.7               4 59.8
South Korea 5 46.3      5 45.4
FR Germany 6 44.8       6 45.0
Ukraine 7 36.9              7 34.1
India 8 31.8                  9 28.8
Brazil 9 31.1                  8 29.6
Italy 10 26.7                 10 26.1
France 11 19.8              11 20.3
Taiwan, China 12 18.8  12 18.2
Turkey 13 18.3              13 16.5
Spain 14 16.5                14 16.4
Canada 15 15.9             15 16.0
Mexico 16 15.2               16 14.0
United Kingdom 17 13.3 17 11.7
Belgium 18 11.1              18 11.3
South Africa 19 9.5         19 9.1
Poland 20 9.1                 20 8.4
Iran 21 7.9                     22 7.3
Australia 22 7.5               21 7.5
Czech Republic 23 6.8     23 6.5
Netherlands 24 6.6          25 6.1
Austria 25 6.3                  24 6.2
Sweden 26 5.7                 26 5.8
Romania 27 5.7                27 5.5
Argentina 28 5.0               30 4.4
Kazakhstan 29 4.9            28 4.8
Malaysia (e) 30 4.8           29 4.7
Finland 31 4.8                   34 4.0
Slovakia 32 4.6                 32 4.3
Egypt 33 4.4                     31 4.3
Saudi Arabia 34 3.9          35 3.6
Venezuela 35 3.9              33 4.2
Indonesia (e) 36 2.8         38 2.5
Luxembourg 37 2.7           36 2.7
Thailand (e) 38 2.6           37 2.5
Hungary 39 2.0                 39 2.1
Others 23.1                          22.6
World 964.8                       903.6